The Good, the Bad and the Ugly of Health Care Bill

Max Baucus's 200 pages, dropped this morning, draws criticism, praise and shock

Sen. Max Baucus dropped the Senate Finance Committee's proposal for health care reform this morning, and at 200 pages it is a doozy. Commentators and health care experts are scouring the document. Here are their early reads on what's good and what's bad in the bill, which is presented under the name "America's Healthy Future Act."

The Good

• Shady Insurance Practices Banned  Ezra Klein: "Right now, insurers can jack up premiums based on preexisting conditions, or even refuse to offer insurance altogether. That practice will be outlawed altogether. Rescissions are eliminated, also."

• Seems to Be Cheaper "The first surprise in the Baucus plan," wrote David Herszenhorn on the New York Times Prescriptions blog, is "a slimmed down price-tag of $856 billion over 10 years. Earlier versions of the health care legislation had come in costing $1 trillion or more." But he warned against flash judgments: "stay tuned for a close look at the fine print; Congressional budget-scoring is often as much art as science."

• Includes Exchanges  "Color me impressed," Klein wrote of Baucus's move "mandating that businesses with up to 50 employees be allowed to buy into the exchanges." He added, "by 2022, the Health Insurance Exchanges will be open to all businesses of all sizes. That's a huge deal." Klein has called exchanges, which allow for more insurance options, "the most important, undernoticated part of health reform."
  

• 'Diversified Risk Pool'  By forcing all Americans to buy health insurance, explains Joe Weisenthal, you solve "the self-selection problem, whereby the healthy and the young opt-out, and the sick and the old opt-in." The "diversified risk pool" is what makes the plan financially viable.

• Buy Insurance Across State Lines  Ezra Klein, again: Baucus incorporates both the conservative request that insurers are allowed to sell across state lines and the liberal demand that regulations be at the federal, as well as state, level. "This could prove seriously transformative in the private insurance market."

• No Pre-Existing Condition Clauses  A bonus to making all the "young, healthy people" buy insurance, Joe Weisenthal adds: you can afford to get rid of the pre-existing condition problem. In any event, the government couldn't reasonably force cancer patients to buy higher-cost health insurance.

• 'Standardized Marketplace'  Theoretically, wrote Joe Weisenthal, the Baucus plan should simplify the process for buying insurance.

The Bad

• Captive Profit Centers  Marcy Wheeler called the plan "an invitation to allow employers to turn their employees into captive profit centers," arguing that the plan makes it extremely difficult for employees to opt out of expensive, employer-run health insurance.

• No Public Option "Critics say," notes Joe Weisenthal, "that without a public option, there's no mechanism to force the insurance costs down."

• Bad for Middle Class  "Working class families will feel a real pinch," wrote Nicholas Beaudrot of affordability measures, in which families earning between 200% and 300% of the poverty line will be especially hurt. "$250 per month ($3,000 per year) for a family of four with an income of $38,000 is going to hurt." [Edited to reflect change in link]
  

• Huge Delays with No Reward  Matthew Yglesias: "In addition to the substantive concessions Baucus made in order to get nothing, it’s worth noting that Baucus made huge procedural concessions in order to get nothing. If he’d just stuck to the schedule, we would have been at this point in the process at a time when Barack Obama’s approval rating was considerably higher."

• No Big Push for Interstate Competition Joe Weisenthal cites critics' argument that the "state-by-state scheme [preserves] oligopolistic pricing power," and argues that, while the Baucus plan theoretically "leaves the door open" for the eventual removal of barriers, "we suspect that politically captured insurance regulators will be unlikely to push very hard on this."

The Ugly

• Individual Mandate Screws Working Americans  National Review's James Capretta: "The individual mandate would be a heavy burden for those low income households getting their insurance through the exchanges. But it will be much, much worse for the far greater number of working Americans who will have no choice but to sign up with their job-based plans." It's a trick, he insists. "That’s how Senator Baucus and other Democrats jam their $2 trillion schemes into $900 billion sacks"

• Abortion Coverage?  Marcy Wheeler, puzzled: "There's a whole bunch of language making sure that Uncle Sam doesn't pay for an abortion--in the mid-20s," she wrote. "I assume that insurers would want to include abortion coverage, since an abortion is cheaper than prenatal care and delivery. Is this Baucus' way of making sure it gets included?"

• Big Cost Variance  Ezra Klein notes that Baucus allows the most expensive plan to cost 7.5 times as much as the cheapest. This is "quite high" compared to the House bill, which only allows a factor of two at most.

• Big Costs for 20-Somethings  National Review's Veronique de Rugy: "Young adults (under 30) who were such key actors in Obama's election back in November are likely to pay a big share of the president's health-care reform costs."

• The Downside of the 'Diversified Risk Pool'  Joe Weisenthal points out that a no-public option, mandatory buy-in plan is a "subsidy to the insurance industry."

• Tax Day  Nicholas Beaudrot notes that health insurance tax credits could make filing taxes more complicated, but also that the credit will be issued at the time of the application, not only April 15th. "That's goodness that should be imported into the final bill."

• No Illegal Aliens  Marcy Wheeler: "I'm on page 21 now, and already there have been 3 discussions of how to make sure undocumented workers (Baucus calls them illegals) will be prevented from buying into insurance in this program. They may have reprimanded Joe Wilson, but they sure kowtowed to him."